Tuesday, March 22, 2011

Quote of the Day: The Real Class War Today

"Many of the protesters [in Michigan and Wisconsin] seem to think the war is between rich and poor," says Michael LaFaive of the Midland, Michigan-based Mackinac Center for Public Policy. "But the real class war today is between government and the people who pay for it. And the government's been winning."

and ontop of that the taxes had to have FDA type rules mandating the description of how those taxes were to be spent...

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Yeah, lets have more government reguation.

Instead of that, how about on the back of your tax form we include a simplified budget: you must indicate how you prefer your taxes be spent.

The results would be aggregated and form a guideline that legislators must work within. Any deviation from the guideline of more than 10% would require a supermajority vote in both houses.

An allocation of less than 100% of your taxes would count as an indication of a desire for lower taxes, and an allocation of more than 100% would count as an indication of a desire for higher taxes. Allocations of more than 115% or less than 85% would be considered extreme, and not be counted.

Yes, the "government" - defined as public sector unions - has been winning, but that's because until now no one has been willing to confront them. Once people understand just how much the unions have managed to steal and the depth of the corruption that they have brought to the execution of public policy, the people will take back their government.

It will not be easy. The unions and their sympathizers are planning their next move. The link below is a recording of a progressive/ union meeting. They have plans for us all:

The SEIU is the second largest union of public service employees representing hundreds of thousands of government workers. They are major contributors to the Democrat party, spending millions to get Democrats elected at every level of government. I'm wondering, if the representative of a foreign group had expressed these views, how long do you think it would take the U.S. State Dept. to declare them a terrorist organization?

that's one of the most frightening speeches i have heard in a long time.

the SEUI power hungry and insane if that is indicative of their views.

the reframing of the banks as villains because states have lived beyond their means is particularly astounding.

i was not aware that the banks ever forced anyone to borrow money. worse, the idiot thinks these are loans when, in reality, they are bonds.

the banks don't own those bonds and are not even in a position to renegotiate their terms. i would be willing to bet that many of those bonds are owned by the SEIU's own pension funds. talk about scoring an own goal...

and, of course, he neglects to take one important issue into account - they will have to run balanced budgets from here on, because no one will lend to them again.

he is an astounding hypocrite as this "let's use our power to gain concessions and reduce government expense" is exactly what he opposes when it is used against him in wisconsin.

far from being principled or even consistent, his position is that of a smash and grab thug looking to take what he can while giving nothing back.

You mean our tax-financed military actually puts their needs and income before the bona fide good of the country? I thought they always found the rock-bottom cheapest way to defend our shores from invasion.

Is the $100 billion and rapidly rising we spend on VA and military pensions--at taxpayer expense--not a good thing?

The $100 bilion a year is only $333 per resident in the USA, or about $1,332 per family of four. It is true, these particular outlays are rapidly rising, but I am sure there is no waste or fat in there.

I am sure we need very expensive medical and pension benefits for all employees of the Department of Defense, even if such costs soon rise to $2,000 annually for a family of four. You family men resent $2,000 annually?

The tax-financed and regulation-supported ethanol program is actually another rural subsidy in drag? Is that what is being said here?

the company would have to be a monopoly, with a customer base that was forced to buy from them

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My customers can go next door, but that guy has the same overhead costs as I have.

I can cut my overhead, but only by cutting my benefits: I don't need an office chair, I can work standing up, get rid of the computer and get an abacus, which I can operate in the dark, so now I can eliminate the light bill.

every farmer would check "farm subsidy". every oil man, "oil subsidy". and so on. you thing special interests are bad now, try your system.

even if people acted without that sort of self interest, you'd still get ridiculous, incoherent budgets that would vary so massively from year to year that simple forward planning and the maintenance of employees and equipment would be impossible.

it would never, ever work.

better to just slash the budget enormously and take the services out altogether and replace them with the private sector to introduce efficiency and rational pricing.

every farmer would check "farm subsidy". every oil man, "oil subsidy". and so on. you thing special interests are bad now, try your system.

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I think with that many entries you have substantial regression to the mean. I seriously doubt you would have huge swings in the budget guidelines, but if you did, the legislators have enough leeway to work it out.

I think you oversimplify peoples interests. Some farmer might decide he is far better off renting his land for a wind farm, and so put his money in the energy budget. But how does he know if it iw wind energy or nuclear energy? It is a simplified budget after all.

As for long term planning, I thought the argument was thet central planners are a massive collective failure.

I mean, you are all in favor of people making and being responsible for living with the effects of their own choices, until someone offers a plan to let it happen.

Farmers are what, 2% of the population, and now you are worried that they might vote for themselves? If you hate farm subsidies, this is your chance.

Hell, I'm a farmer and I'd vote against them: they only go to the big guys anyway.

have you ever tried to run anything or plan programs that take several years to complete?

so, your department suddenly gets gutted because of a terrorist attack right before the election and everyone votes "defense". now what do you do? fire 1/3 of your people?

madoff is in all the papers and suddenly the SEC budget doubles. it will drop again the next year when he's not in the papers, but it's spend it or lose it. you think that will drive efficiency?

your plan is totally unworkable.

imagine trying to run a company that way where each shareholder decides where he want's his investment spent. you'd have a bankrupt mess in no time.

your idea is cute, but it is totally implausible in real life. you just cannot plan that way and swings in public perception will makes budgets wildly unpredictable.

a very limited form of that sort of direct democracy is what is sinking california. get a prop on the ballot, win, and get money carved out of the gen fund to pay it. this leads to ludicrous planning messes by depriving everything else of money. the state parks close, but the lesbian Buddhist poetry about cats outreach goes unimpeeded.

"Some will argue that government is a coercive monopoly, but they have the same choice as my customers: they can go someplace else."

i think that is a very weak argument. "going somewhere else" is not at all easy. i have dual citizenship and can leave easily, but i am young, professionally successful, healthy, and well funded.

if you are sick, no one will take you. ditto if you are poor or unskilled. you make it sound like you can just move anywhere you want, get a job, and become a citizen. you can't. it's VERY difficult for most people.

even for me who already has dual citizenship, just moving abroad is not enough. i have to give up US citizenship. that is a taxable event (and what massive taxes they are). every asset i own will be market to market and treated as sold. until i pay that tax, i cannot even renounce my citizenship.

so much for "free" to leave...

further, your comparison is inapt.

a customer who does not like your offering or that of your competitor is free not to buy from anyone. that is not so with government. i can easily not get cable TV, but how can i not have a government?

"As for long term planning, I thought the argument was thet central planners are a massive collective failure."

they are, that's why you defund them and take away their power.

just because they do a bad job is not an argument to unleash the mob rule of a direct democracy budget, it is an argument to move that function back to the private sector.

your point about choosing how much of my tax dollars to allocate at all seems not to make sense.

are you saying that i can, when faced with a $100 tax bill choose instead to pay $85 and give myself a tax cut?

everyone would do that. it's a classic tragedy of the commons.

we'd wind up with zero government pretty quickly. (though the federal budget used to be 2% of GDP before hoover and FDR went nuts) i'm a huge proponent of small government, but i don't think that's the way to get there.

or, if i still have to pay the tax, then it's not really allocation, is it? where would that money go.

I get the impression that the only answer you will accept is your answer.

I see your point about public opinion: you don't want it, you want yours.

Kidding.

The swings you note are powered by politicians, often in weeks or days, in search of votes or press.

My plan would operate once a year, and be an amalgam of 100 million opinions, many of which are not now heard.

If it turns out that wild swings occur, there are plenty of ways to create a moving average.

You seem eager to let individuals make their own choices and live with the results, but unwilling to aggregate those decisions as policy.

And, consider this. The wealthy are taxed more. Under this plan they would be representated by the dollar. They could push for lower taxes, and get less say as a result.

The basic idea may need modification, but it is no less workable than what we have now.

Suppose the people go on some crazy peace kick and suddenly suggest refunding the entire military. It would take a 2/3 vote to over ride the guideline, and I have no doubt our legislators would make the compromises to make that happen.

The tax guideline would not be 100% binding, but anyone voting for an over ride will have some 'splainin to do come election.

We hear an awful lot about what the people want, with not much evidence but slanted polls. And unlike voting, this poll is mandatory for taxpayers.

Finally, people of conscience could rationalize that THEIR money is not being used for something they don't support. Even if it isn't real, it could assuage a lot of present unhappiness. If I vote to defund Education, and I am outvoted, at least my right to do as I please with my property is respected, and same for the other side.

Ok, so giving up the property is still mandatory, but I can also push to reduce that.

Given that the perfect world, no government idea is unlikely, we can still improve what we have.

Got a better idea or another way to smooth out the bumps in this one?

( I'm still amused by the argument this idea would disrupt government planning.

are you saying that i can, when faced with a $100 tax bill choose instead to pay $85 and give myself a tax cut?

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That isn't what I had in mind. You would still owe the $100 dollars.But if enough people did it the legislators would have to come up with a new reduce budget for the following year, or come up with a supermajority for a larger one.

The poll could be strictly advisory, at first, but just publishing the results would change the debate. If the results are too whacky, scrap the idea.

But, what would it cost? You send out the tax forms anyway, and more and more are filed electronically.

It seems to me to be a cheap way to find out what people really want, and if they want cuts, they are going to have to make them. they may find it is harder than they think.

Besides, with a one page simplified budget, there will be plenty of wiggle room for politicians to bargain over, just not a total blank check, like today.

I actually think it is a good idea, and so did my father. I'm surprised it doesn't come up more often.

Sure, there could be some swings, but I don't think so. Too much inertia. Certainly nothing like the about face we are seeing on nuclear power right now. A year from now, we will have a better picture, and other priorities.

they are, that's why you defund them and take away their power.............

we'd wind up with zero government pretty quickly. (though the federal budget used to be 2% of GDP before hoover and FDR went nuts) i'm a huge proponent of small government, but i don't think that's the way to get there.

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Well, which is it?

Like I say, you could have some averaging scheme to prevent defunding pretty quickly.

And the plan is partly (or totally) advisory. Congress can still overrule. And it would give them ammunition to push back against special interests.

Lobbyists would have to take to the airways, and make their pitch to the people, instead of handing over money in the back rooms.

Tragedy of the commons is when rational individual decisions add up to a bad collective one. Each person has no incentive not to overuse a limited resource, and no incentive to respect their neighbors rights.

That is the problem with unfettered capitalism, if you think the globe is a limited resource.

There are three ways to deal with the commons, as I see it.

1) Sell it. Distribute the funds and let each person invest the money as they see fit. hope the new owner repects your property rights, and doesnt raise pigs in front of your house. This is the plan for Virginia's ABC stores.

2) Auction off a lease to the highest bidder. If the winner bids too high and has to overgraze, it will lower the value for the next auction. Divey up the proceeds among the "owners". This is what (Vermont?) did with their liquor stores.

3) Parcel out the ownership as shares. A potential lessee would then have to negotiate individually to lease a percentage of the commons. Those who wish the commons greener, and more accessible to the public, may withhold their shares, without interfering with anyone elses wishes or property rights.

However, they will bear the cost of their decision through forgone income. They do not get to say "no" for free. This is the case in Massachusets liqor sales, where they have some dry towns. (you could lease your share, and still be a free rider on the public share.)

I prefer the latter solution. The "mob" has less control over their neigbors: they can't vote to have a pig farm and force it down everyones throat with a majority of one. Depending on the reults more or fewer people will choose to hold a portion fallow, so use of the resource is democratically and price regulated.

Governments role is reduced to protecting property rights and recording deeds for the shares.

My plan would be sort of a hybrid, in this case. Each person would vote their shares as to how the common was to be used. Government would still auction off a lease, but the conditions of the lease would be informed by the voting process.

Unlike voting your tax dollars, voting your shares in the commons has a twist: if you don't like the way things are going, you could buy up other peoples shares, increase your vote, and your share of the proceeds.

"When my company sells $1 worth of stuff it can only do it by taking $2 from my customers.

What is your point?"

Oh Geez! Where to begin? It's such a simple point. When you sell a customer something for $2 they get something they value more than $2 in exchange, or they wouldn't do it. The amount of value you add to the something, costs customers less than it would cost them to get it somewhere else. For example, you import artichokes from California for $1 each, and sell them for $2. The customer can't drive to California & buy them himself for less than $2, so he buys them from you. If he didn't value them at more than $2, he wouldn't buy them.

Your $2 sale price must cover all your costs including the cost of the artichoke and the cost to import it from California, and must leave enough profit to make it worth your while,, or you won't stock them.

Government, on the other hand, forces you to buy something you value at $1, or perhaps don't value at all, by ripping $2 out of your pocket.

Learn some economics!

Learn to think logically!

Learn some economics!

I'll sure be glad when morganovich gets those 'instruction shouters' hired so I can pay to have several of them follow you around shouting those phrases. Then I will spend a lot fewer keystrokes.

"My customers can go next door, but that guy has the same overhead costs as I have.

I can cut my overhead, but only by cutting my benefits: I don't need an office chair, I can work standing up, get rid of the computer and get an abacus, which I can operate in the dark, so now I can eliminate the light bill.

Boy, I feel a lot better, now that eliminated all that waste."

What are you blathering about? Why don't you respond to the comment you quoted?

Listen to yourself. Most people would allocate 0% of their taxes, indicating they wanted to pay no taxes. "Let others pay", they would say.

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You don't read.

In my discussion I explained that the minimum allocation allowed would be 85%. (or some such number) Allocate less than that and and your vote gets tossed out. Same for allocating more than 115% as an idication for a tax increase.

This would allow for substantial tax decreases in a few years if enough people were serious about it.

You would still owe 100% of the taxes due, and your "allocation" would apply to drafting the nexxt years budget.

Not everyone would vote zero tax, even if it was allowed, since most people realize some government is necessary.

And they would have to decide what to cut.

This is the same method used in Gymnastics scoring: all votes are exposed at once, and the high and low vote are discarded.

Listen to yourself: you are all in favor of letting people make their own decisions, but you don't want them to actually have the chance (even if it is advisory).

Are you aware that the people who authorize spending of your tax money are elected for 2 year terms?

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Yes, and some are elected every six, some are elected on staggered four year terms, etc. Call it a rough average and let it go.

The point is you pay taxes every year, and you must respond, unlike the voting booth, whichis optional, and your choices are pre-picked. Furthermore, my plan, even if it was only advisory, would provide knowlege we do not have now.

It would change the debate, and make it harder for politicians to make unfounded claims about what the voters want.

You vote every two or four or six years, and that's the last real input you get, unless you pay a lobbyist. This is a way to provide more feedback, and feedback of a different kind.

I don't think it is a crazy, or radical idea at all, in fact, i don;t think it would make much difference in how tax money gets spent, because averaged over all voters,the results would probably be close to what we have now.

That would be a real shocker and a disappointment wouldn't it? to find out that our screwed up system actually works pretty well.

And if not, what is the harm? It would make it easier to get the sort of changes you are advocating, smaller government, less interference.

Government, on the other hand, forces you to buy something you value at $1, or perhaps don't value at all, by ripping $2 out of your pocket.

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When you buy my product for two dollars, you know it only costs me one dollar.

When you "buy" a government product for two dollars you know it only costs the government one dollar.

But my product you "value" at two dollars and the government product you "value" at one. You expect the government to be 100% MORE efficient than private enterprise.

Lets not confuse value and cost: value is subjective, and cost is not.

I get attacked from all directions over the equation Total Cost = Production Cost + External Cost + Government Cost, becaue people claim it is subjective.

No it isn't. Those are real costs, and the equation holds true, whether we bother to discover the costs or not.

However, it is possible I left out some entire category of costs, like political perversity and stupidity, but I'm content to let that fall under government costs.

Total costs are whatever they are. I'm convinced that without any government my total costs would be a lot higher. Sure, we could each hire 24 hour security, but, with no government, whats to prevnt thme from turning on you? Whats to prevent me from having them also watch for when my neighbors leave, or there guard doesn't show up?

Is there waste and even an element of chance in the government we have, sure, same as in my business. But with no government we would find out in short order why we endure it. I could eliminate waste, and just plain bad luck, in my business too.

"Yes, and some are elected every six, some are elected on staggered four year terms, etc. Call it a rough average and let it go."

Ah, no. Federal spending is authorized by the House.

You have really gone wild with this idea of democratic tax allocations. But sadly, as usual, you live in a fantasy world, and won't listen to reasonable objections. morganovich has pointed out all the problems, and all the reasons why it won't work, but you just brush them aside. There's nothing I can add to his comments. You have little understanding of human nature, or you would see more clearly.

"You vote every two or four or six years, and that's the last real input you get, unless you pay a lobbyist. This is a way to provide more feedback, and feedback of a different kind."

Are you aware that you can let your wishes be known by calling or writing or emailing your elected officials? You can do that as often as you wish. If I were you, though, I would ditch that Android you use, as it makes your writing even less coherent than it actually is. You can even arrange to meet with them in person. Many even hold "town hall" meetings. Or at least the did, until they found out how hostile their constituents were to their unconstitutional, big government ideas.

"When you buy my product for two dollars, you know it only costs me one dollar.

When you "buy" a government product for two dollars you know it only costs the government one dollar."

Damn! And you were doing so well in your previous comment. I thought for a moment you had finally gotten it, but now...

What happened?

Look. I'm typing slowly so you won't get lost. Read carefully.

When I buy something from you, I don't care what it cost you. I can assume it cost less than your selling price, or you might be out of business the next time I come by. If I buy from you, it's because I value the product more than the $2. I have a choice whether I buy something from you.

Government isn't a business, makes no product, and doesn't make a profit. I don't have any choice with government, as the $2 is taken from me at gunpoint, and I get a product I may not value at all, or may value at less than the $2 I'm paying for it. The two don't compare. I'm not sure why you keep trying to do so.

"But my product you "value" at two dollars and the government product you "value" at one. You expect the government to be 100% MORE efficient than private enterprise."

Boy, this is tough. How do you keep missing it? There is no incentive for government to be efficient. No bottom line, no profit, no competition. A product I value at $1 will likely cost me $2 if provided by government.

When the shaded areas on the graph on the first page are equal, the costs and benefits of those rights are equal. Property rights are mutually respected AND A BETTER RESULT FOR ALL CONCERNED, is obtained.

Private enterprise has no more incentive to achieve this "better" result than government does. But since the benefit accrues to eachof us as individuals, we have an interest in seeing this accomplished.

Not too much, and not too little.

If government can assist in achieving that better result for a government cost that is less than the vcalue of the result, then government has indeed turned a profit, which accrues directly to us.

Government does, in fact, have an incentive to do this, and that goal is written into public policies.

You won't agree, of course, so you will be doomed to always paying more than necessary: in effect, stealing from yourself.

Whereas it is difficult to imagine people paying a fee to an ‘air corporation’ to be able to breathe the air in a particular location, it is not so bizarre to think of them paying to fish, sail, swim or drink from a water resource. In this case the new ‘owners’ of a previously open-access resource would have an incentive to maximize its value. If people wished to fish in the water, the owners would charge a licence fee to keep numbers to the levels which maximized their income and prevented resource depletion. Similarly, if people wished to deposit effluent in the water they would have to pay a fee which compensated for any reduction in the value of the water as a fishing or recreational resource.

If I buy from you, it's because I value the product more than the $2. I have a choice whether I buy something from you.

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OK so it is a value judgement. But eiter way you know that organizations have overhead costs, and you WILL pay more than it costs them to produce, or you won't get it.

My customers can go someplace else, but it might not be easy or cheap. For me, that is a positive externality that creates part of the value: makes my product more competitive than it might be.

Same with government, you can go someplace else and try another government. It might not be easy or cheap, but that is part of what creates the value for the one you have.

And there is risk involved. Once my customers go the trouble and expense of getting to my competitor, they may find the product is no better.

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Same with my neighbors. Someone is shopping for a home in the neighborhood, and they don't like (value) any of the homes that are here.

I might happily build him one, but my neighbors have prohibited that through downzoning me. By making it difficult and expensive for him to go someplace else, they have raised the value of their offering, whether he likes it or not.

In the example above, the polluter pays a price that is equal to the value of the damage caused for other uses.

In my case, (and many others, im just familiar with this one) the neighbors have reduced the value of my use, and increased the value of theirs, without paying for either the damage they caused me or the benefits they gained.

They have effectively annexed a very large back yard, without paying for it.

By not enforcing the proerty rights equally, government not only fails in its primary job, it creates a net negative value for all.

But sadly, as usual, you live in a fantasy world, and won't listen to reasonable objections. morganovich has pointed out all the problems, and all the reasons why it won't work,

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I think that the idea of a benificent Darwinian economy mostly devoid of government is a fantasy world. that can never work.

You have raised some points about my idea, but none of them require more than modest modifcations to my (admittedly) rough outline. I did not brush his objections aside, I suggested changes to accomodate the objections.

The differnce between my plan and yours is that mine can acommodate really significant changes, in order to meet your objections, whereas you plan is totally inflexible.